An organization’s success largely depends on the quality of its corporate innovation. Famous innovators like Apple, Samsung, and Uber, have secured their positions as the leaders in their respective industries due to their breakthrough innovations. At the same time, there are giant corporations that lost their position as they failed to adapt to market requirements in time. But why do corporate innovations fail? We will discuss that in a bit.
The case of Kodak is a classic example in this context. How did it go bankrupt despite dominating the photographic film industry with a market share of over 80% in the US and about 50% worldwide back in its days? One of the company’s engineers, Steven J. Sasson, was the one to actually invent the first digital camera back in 1975. But the management did not encourage it. It failed to see digital photography as a disruptive technology for its industry.
They were of the opinion that printed photos had been there for over a century and people would not want it any other way. Moreover, Kodak did not want to harm its film roll business by encouraging the new technology that no longer required film rolls. But no one can tame innovation, it will bloom some way or the other. And that is exactly what had happened, which eventually dislodged Kodak out of its own throne.
Now that we get a sense of how even big companies fail to innovate and face harsh consequences for the same, let’s explore some of the major reasons why corporate innovations fail and, most importantly, how to avoid them.
Why do Corporate Innovations Fail?
1. The Fear of Failure
A seed would not germinate if it does not get a suitable environment. Similarly, an innovation-friendly workspace is required for successful corporate innovation. Often, companies are too influenced by the fear of failure and do not try out things that have good potential. As a result, employees do not feel motivated to think of new ideas. Their attitude is along the lines of — “What is the point? My boss is going to reject it anyway.” So, the first step towards developing an innovation culture is to give your team members the space to grow by letting them experiment, fail, and learn.
2. Not Understanding Consumer Demands
You should never forget whom you are innovating for — your consumers. So, you should always consider their requirements before investing in a new product or service or updating an existing one. Otherwise, you will end up creating a product that your consumers did not need in the first place. It will be an innovation failure despite the resources and effort put into it. In the late 1900s, Coca-Cola decided to change its century-old formula by making the already sweet soda even sweeter and introduced New Coke — something the consumers did not ask for and of course absolutely hated. Just 77 days after its launch, Coca-Cola had to bring back the old recipe as Classic Coke.
3. Focussing on Short-Term Goals
Fulfilling short-term goals is of course a very good practice. But companies should not do that at a cost of neglecting their long-term business ambitions. Moreover, when faced with a problem, many companies tend to solve it temporarily by adopting the “let’s do this for now” approach. This is actually harmful in the long run as it creates several gaps that are seldom paid attention to. Hence, the saying goes — “short-term solutions lead to long-term problems.” Additionally, in the pressure to meet short-term targets, companies often spend a lot on marketing and sales. Thus, they spend a huge chunk of the budget and do not leave much for R&D and innovation activities.
Now, let’s hear from you — do you know of any other reasons why corporate innovations fail apart from the ones mentioned above? Has your company ever failed to innovate? How did you deal with it? Get in touch & let us know!